Oregon health regulators have flagged three payers for “unreasonably high healthcare cost growth in 2023.”
In an October report, the Oregon Health Authority said that Moda Health’s Medicare Advantage plans increased costs by 15.4%, PacificSource’s commercial plans grew 7.3%, and UnitedHealthcare’s Medicare Advantage plans rose 6.3% between 2022 and 2023. The state’s Sustainable Health Care Cost Growth Target Program aims to limit annual per-person cost increases to 3.4%.
OHA is requiring UnitedHealthcare and PacificSource to submit a performance improvement plan by the end of January 2026. The agency excused Moda from submitting a plan because the scrutinized MA plans are no longer offered.
The improvement plans must identify what is causing high cost growth, name actions the insurer will take to address cost drivers, and provide a timeline for reducing cost growth.
OHA made 120 comparisons between plans, health systems and medical groups while examining spending for people with commercial, Medicare Advantage and Medicaid coverage. The agency found most entities had acceptable reasons for higher-than-target cost growth, including increased frontline workforce costs, high drug costs or expanding services to meet community needs. Five organizations in total lacked acceptable reasons for their spending increases, including St. Charles Health System and The Corvallis Clinic, in addition to the three insurers.
The 2022-2023 measurement period is the first time OHA can require organizations to submit performance improvement plans under the program, which the Oregon Legislature established in 2021 to help control healthcare spending. Starting in 2028, OHA can begin issuing fines to healthcare companies that fail to meet the target without acceptable reasons three times in a five-year period.
“UnitedHealthcare is honored to serve Medicare beneficiaries in Oregon with high-quality, affordable coverage,” a spokesperson told Becker’s. “Our plans are reviewed and approved annually by CMS, with any changes fully compliant with federal regulations. We are currently reviewing OHA’s findings and plan to file a petition for reconsideration.”
“While we respect OHA’s process, we believe the findings regarding our commercial cost growth do not fully reflect the extraordinary pressures facing health plans in 2023 and beyond,” a spokesperson for PacificSource told Becker’s. “Our costs increased largely due to factors outside any single organization’s control, including steep specialty drug price inflation, higher utilization as members returned to deferred care, and broad inflation across the health sector.
Our priority is ensuring any plan accurately captures the true drivers of spending and does not reduce access, benefits, or quality. We will continue working with providers, employers, and policymakers to address systemic cost pressures while protecting the care Oregonians rely on.”
